Morning Bells (17 Jan 13)

Good Morning Friends.

RISK is my life, POSSIBLE is my hope, IMPOSSIBLE is my enemy, DANGEROUS is my game. Don’t surprised, it’s me, your MG.

Congratulations to all blog visitors & members - in just 2-3 days we are going to cross 1 Lakh visitors in just 4 months, its all possible only because of your love & inspirations.

I am sorry but I have noticed that some of you are not taking this MBells seriously, they come to blog only for calls and they overlook important discussion in MB, so sad. Think that whatever you are reading is just a summary of 2-3 line text of 1 page news in each statement. I just want to clear you that I work hard for preparing this MB, just to give you all direction of market in comings days and to make your trade experience profitable. But if you are habitant to overlook important points highlighted in MB, I can just say – you will be loser in stock market, sooner or later.

Oops, so finally as discussed, profit booking comes in several counter between 6050-6100. We were discussing it since longs that whenever Nifty will attempt to range 6050-6100 first bears will give a strong fight to resist and secondly profit booking will come on higher levels. Same has happened y’day, as Nifty tried to move higher investors prefer to book profit on higher levels. Auto and Metal stocks were among the prominent losers.

Well, RIL is the top Sensex gainer, up over 2% on reports that the oil ministry may take the Rangarajan panel's recommendations of mandating a price of about $8-8.5 for natural gas, to CCEA or EGoM for approval.

Nifty was still balanced but RBI governor Subbarao’s statement fuelled the fall, in a statement he said that inflation was still high is being viewed as a signal that the stock market cannot take a interest rate cut on January 29 for granted.

Gainers – Reliance Industries, Dr Reddys Lab, TCS, NTPC, ITC, Sterlite Inds, Gail India, Cipla were among gainers in Sensex and Nifty.

Losers - Hindalco Indus., JP Associates, Maruti Suzuki, Tata Motors, Reliance Infra, Jindal Steel, Maruti Suzuki, Mahindra & Mahindra, SBI, Tata Steel  were  among losers in Sensex and Nifty.

Sectoral - Oil and gas indices is only the gainer while FMCG, Consumer Durable, Healthcare, Bankex, PSU, Power,Realty, Metal,  Capital Goods, IT, Auto indices are the losers.

Some other Domestic news are –

The government is planning to increase import duty on gold, according to reports. Reports said that the basic customs duty on gold and platinum could be raised to 6% from 4%.

Findings are revealed in the paper, ’Convergence with Divergence’, which analyses how household spending in China, India, Mexico, Turkey and South Africa will change in comparison to the USA and UK over the next three years

For the first time, economic forecaster The Economist Intelligence Unit has teamed up with Mintel, the consumer market expert to predict key trends for the future of different Fast Moving Consumer Goods (FMCG) categories in emerging markets, including India.

·        Household products are expected to continue booming – particularly in washing up liquids as cheap labour supply makes domestic help more economical than using dishwashers

·        Consumers continue to shift gradually away from home cooked food – demand for breakfast cereals is increasing as lifestyles become busier

·        India is already the world’s biggest packaged tea and whisky market by volume, although spending growth potential remains in both sub-sectors.

·        In the clothing market, male expenditure on clothes outstrips that of women, although this is expected to ease out in the coming years

On Global front –

merging economies are set to grow faster than the developed economies over the next four decades and India is likely to become one of the three largest economies by 2050, estimates a PwC report.  

MARKET OUTLOOK –

Nifty closed at 6002, down 85 points after Reserve Bank of India (RBI) governor stated that the inflation is still high and the market cannot take an interest rate cut on January 29 for granted.

Maybe that correction can make the Nifty to correct to about 5950. I see this weakness likely to continue till tomorrow.

Good news is that some good FIIs turned bullish on Indian economy and said that ndian 'elephant' to turn 'tiger' in 2013; ups BSE Sensex target to 22,200 versus 21,600 earlier and Nifty target to 6,900 points as against 6,600 previously.

As discussed in past 3 days, 2-3 good earning result will give strength to market, cheered by Inflation figure and GAAR today RBI governor messed the sentiment.

Now all eye will be on Friday blockbuster Wipro, HDFC Bank & RIL (Fri 18 Jan) and I am expecting no one of them will disappoint except RIL and will help Nifty to hold its current levels.

As discussed Nifty is on the lower end of range and buying momentum to come above 6030-6040, if Nifty crossed levels decisively then Nifty will switch to 6050-6150 band.

Now trend is turning sell on rise till 6070 (As we discussed, profit booking on higher levels) is not taken out on closing basis. For longs they can hold ill 5915 is safe. Next trigger RBI policy on 29 Jan. In between triggers could be announcement on Diesel price hike, and some more triggers would be announcement of good quarterly nos from 2-3 good high beta.

The INDIA VIX on NSE rose 2% and ended at 13.90 against 13.58.

FNO PCR is 0.92 against previous close 0.89.

Indian Rupee declined further 0.18 Paisa against USD y’day and was trading at 54.79 against its previous close 54.61.

S&P 500 (US) was trading lower at 1471.13 down 1.21 then its previous close at the time of writing M Bells.

NIFTY OUTLOOK –

After 2 days green formula finally Nifty loosed steam y’day after crossing its physiological level of 6000 mark. We had discussion since past 3-4 days that Nifty will see some pressure once it will reach in the range of 6050-6100, and same proved y’day itself. If someone noticed, still Nifty is not breaking our weekly range and trading in the range, which give us good idea to trade better and maximize our profits.

Buying in selective stock will continue and overall Nifty remain in pressure todayl.

FII sold 12901 contracts of Nifty & Bank Nifty futures worth Rs. 343.3Cr. with net OI decreased by 4663 contracts indicating FII have booked profit in longs. Volume also suggesting lake of participation at higher levels.

Nifty is in range of 5835-5885-5990-6040-6090 for current week.

Resistance – 6041 – 6080 – 6105 and Support – 5977 – 5952 -5913

Opening seems flat, buying can be seen in selective high beta stocks, and rest – market may remain range bound.

STOCK OUTLOOK -

(Stock outlook needs to watch stock movement carefully and then one can bet after having a look, I tried to put related info which will help you in taking positions.)

OMC –

After such a disappointing news now Rate-sensitive sectors constitute one of the key themes for the year as interest rates are to fall in the medium-to-long term and growth is set to recover on continued liquidity levels and positive corporate earnings.

RIL –

RIL is the top Sensex gainer, up over 2% on reports that the oil ministry may take the Rangarajan panel's recommendations of mandating a price of about $8-8.5 for natural gas, to CCEA or EGoM for approval.

So today, it can be hero of market once again.

Banking –

After statement of RBI governor now view is neutral on banking stock. But I believes that the public sector banks are still plagued with non-performing assets (NPA) and therefore, they would like to stay away from this sector at the moment.

Rcom –

Asix bank & Yes bank fell today ahead of RBI governor’s statement instead of good no.s, further to news Axis Bank has picked JPMorgan Chase & Co and Citigroup Inc for a share sale to raise up to USD 1 billion, three sources with direct knowledge of the deal said on Wednesday.

Axis Bank's share offering to institutional investors is likely to be launched in two to three weeks depending on market conditions, two of the sources said, declining to be named as the details of the deal are not public yet.

Rcom –

Reliance Communications and Alcatel-Lucent enter long term billion dollar contract to further improve network performance and customer experience to offer Next Generation telecom solutions across multiple devices and platforms.

AirTel –

Sanjay Kapoor, CEO (India and South Asia) has resigned from the company and Gopal Vittal will take over as the head of its Indian operations with effect from March 1, 2013.

"After almost 15 years of illustrious innings at Bharti Group, Sanjay Kapoor, CEO (India and South Asia), Bharti Airtel, has decided to pursue his future aspirations outside of Bharti," the company said in a statement, announcing some top level changes.

HCL –

India's two largest software services providers Tata Consultancy Services and Infosys have already topped street expectations in Oct-Dec and all eyes will be now on HCL Technologies  , which will report its earnings on Thursday.

The Gurgaon-based information technology company is expected to report a net porfit of Rs 840 crore, down 5 percent quarter-on-quarter, while revenue is seen up 2 percent at Rs 6,207 crore, according to a CNBC Awaaz poll.

Bajaj Auto –

Shares of Bajaj Auto was down 2% despite company has posted 3% profit for Q3.

The main reason for fall in stock was MD said in a statement that Bajaj Auto will miss its forecast of 5 million (50 lakh) unit sales for the current financial year as demand for two-wheelers continues to remain sluggish, especially in the domestic market, Rajiv Bajaj, MD said on Wednesday.

Tata Motors –

Tata Motors slipped as its global sales decreased 13.88% in December 2012 to 98,968 units over the same period in the previous year.

Hero Moto –

Sluggish volume growth and margin pressures are expected to weigh on India's top two-wheeler maker Hero MotoCorp , which reports earnings for Oct-Dec on Thursday. Bajaj Auto on Wednesday reported third quarter results in-line with street expectations.

The maker of Splendor and Passion motorcycles is expected to report a net profit of Rs 580.14 crore, down 5 percent year-on-year, while net sales are likely to rise 1.5 percent at Rs 6,124.5 crore, according to a CNBC Awaaz poll.

Deccan Chronicle –

NSE will stop business in scrip from Jan 23.

KFA –

Vijay Mallya-owned Kingfisher Airlines today approached the Supreme Court challenging the Karnataka High Court's order directing it to deposit around 185 crores with the Income Tax Department as tax deducted at source (TDS) from its employees' wages.

============ OPEN CALLS ============

# Please remember when I make special remark with any position then one should need to take care of that else you can make loss instead of profit.

# Be with strict SL and don’t hesitate to book even small profit if Nifty doesn’t shows strength.

Wait is the winning key in stock market, don’t get impatience.

============ INVESTMENT BASKET ============

(Stock in this section is with view of 3 months to 1 year)

Mahindra Holiday – @334 TG 375+ (Active from 15 Dec 12) CMP – 330 (Gain -1%)

Satyam Computer – @103 TG 130+ (Active from 15 Dec 12) CMP – 115 (Gain +11%)

On Mobile – @44 TG 60+ SL 41 Qty 2K (Active from 01 Jan 13) CMP – 45 (Gain +2.5%)

============ HOT SHOT ============

Keep eye on following stocks, if Nifty shows strength then these stocks can give you reasonable return in very short term –

============ PL Sheet (started from Jan 2013) ============

(If someone find any error in PL, please draw our attention)

MG Blog (Total 25,650) –

Cash = +9,650.00

FNO = +11,500 + 4,500 = 16,000

(Gain from Bajaj Auto 3000 + Gain from TCS 1500 = 4500)

Billionaire Club

TOTAL = +29,750.00 + 14,750 = 44,500

(Gain from Axis Bank future 5250 (@1389 sold 1410) + Tata Steel future 6500 (@ 423.5 sold 430) + Bajaj Auto 3000 (@28 sold 40) = 14,750)

Today’s MG Mantra –

Go with rate sensitive stocks and OMCs. Also its not bad idea to book partial profit at higher levels just to keep safe your investment.

Have a Profitable day – MG

Disclaimer –

1. I have shared my view as per my limited knowledge; please use your own skills to make a wise decision before execution of trade or consult your financial advisor.

2. Those that don’t have patience and are not willing to book loss also in cases don’t enter this market.